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The Lexpert CCCA Corporate Counsel Directory & Yearbook is a joint endeavour of the Canadian Corporate Counsel Association and Lexpert. It provides the most extensive listing of corporate counsel in Canada.

Focus: Judge confirms settlement on chemo drugs

An Ontario judge has confirmed a class action settlement involving diluted doses of chemotherapy drugs despite the objections of nearly 50 patients in a case that highlights the imperfections in the class proceedings system, according to one expert.

Around 1,200 affected class members will receive $1,500 each as part of the agreement, reached after alleged mistakes in the preparation and administration of cancer treatments resulted in them receiving lower concentrations of drugs than prescribed by their doctors.

The $2.4-million settlement in Hunt v. Mezentco Solutions Inc., approved by Ontario Superior Court Justice Gregory Verbeem on April 7, came in well below the $25-million damages originally sought, and it involved no admissions of liability on the part of Mezentco or Medbuy Corporation, the drug supply and bulk purchasing companies who were defendants in the suit.

But class counsel — a team combining members of southwestern Ontario firms McKenzie Lake Lawyers and Sutts Strosberg LLP — said the settlement was an excellent one, considering the law was against the plaintiffs, and claimed the proceeding was “doomed” if the litigation continued any further.

Jasminka Kalajdzic, a professor on the law faculty at the University of Windsor, was in the courtroom for the approval hearing, and she saw many of the objectors take the stand to voice their concerns about the settlement.

“For class members who may be looking for more than just a settlement cheque, the class action model definitely has its limitations,” says Kalajdzic, who spent a decade in private practice working in the class actions field before joining the university.

“The model is such that class counsel have hundreds or thousands of ‘clients’ with whom they have, in some instances, virtually no relationship whatsoever. That’s not ideal for class members who may want answers to hard questions or better information about how the whole process works — or who just want to have their day in court. I can certainly understand how frustrating it is for ordinary people who just want justice,” she adds.

According to Verbeem’s decision, the under-dosing problem occurred between February 2012 and April 2013, when the powdered drugs ended up combined in liquids containing too much saline solution.

An investigation launched by the provincial government soon after found that the average concentration of the two chemotherapy drugs administered was between seven- and 10-per-cent lower than indicated on packages.

However, crucially, the inquiry concluded that there was only a small chance the mistakes would have a serious effect on patients’ outcomes and noted that physicians had not changed their treatment plans in response to the uncovering of the dosage problems.

In his decision, Verbeem wrote that it was easy to see how “patients affected by the dosing incident, and others, could intuitively arrive at a sincerely held subjective conclusion that the administration of diluted chemotherapy drugs, on a repeated basis, resulted in a negative impact on the outcome of their treatment.”

However, “while such reasoning is understandable, it does not form the legal basis upon which the plaintiffs’ claims are to be determined, on the merits,” Verbeem went on. Instead, he explained that class members would have to prove that they had suffered a form of injury or loss that is compensable in law and was caused by the defendants.

The judge accepted class counsel’s claims that, despite “exhaustive efforts” to develop supportive evidence, they had been unable to build a case that the dosing incident had impacted patient outcomes.

In addition, while many patients had suffered distress and anxiety since finding out about the drug dilution, the judge noted the vast majority of cases would not rise to the level of psychological harm needed to warrant compensatory damages. Exiting case law, he said, requires proof of a recognized psychiatric illness, something very few patients would be able to demonstrate.

Although 49 class members opposed the settlement, just seven exercised their right to opt out, allowing them the opportunity to continue the case alone. One of those was later allowed back in to claim the settlement damages after a change of mind.

Still, Verbeem credited all of the objectors for the “commitment, thought, attention and heartfelt candour” they put into their submissions, as well as the “courage, poise and eloquence” of those who appeared in person at the hearing.

“Anyone who was present in the courtroom while the objectors spoke was undoubtedly moved by what they heard,” he added.

“I am satisfied that, through their factum and submissions, together with the evidence on this motion, Class Counsel have adequately explained why the terms of the proposed settlement ‘fall within the zone of reasonableness’ . . .” he wrote, approving the deal.

The judge also approved class counsel’s requested fees of $400,000, noting that the actual value of their time and disbursements came out well in excess of $500,000, while the contingency fee agreement in the case allowed them to claim closer to $600,000.

Verbeem also noted that he remained “mindful that 40 of the patients affected by the Dosing Incident were minors, at the time of their treatment.”

“However, the Office of the Children’s Lawyer received all of the material filed on the settlement approval motion and it does not oppose the relief requested, including approval and I am otherwise satisfied by the materials and submissions before me, that settlement of the minor Class Members’ claims ought to be approved . . .” he said.

Michael Peerless, a partner at McKenzie Lake who acted for the class, say he’s “very proud” of the settlement, considering all the circumstances, adding that most of the class members were pleased with the result.

“It’s easy to say more would be better, but it’s not how Canadian law works,” he says. “Sometimes, the legal system can be confusing. Class actions attempt to open it up and make it less so, but it can be hard to explain concepts like standard of care and causation to laypeople.”

Craig Lockwood, a litigation partner at Osler Hoskin & Harcourt LLP who was not involved in the case, says while objections are fairly routine in class action settlements, its rarer to see such vocal opposition from within a class membership.

“It was a very sympathetic and emotional class, which makes it very difficult, but on the other hand, it sounds to me like they were done a service by their lawyer considering the evidentiary hurdles,” Lockwood says. “Part of the difficulty with these cases is that they come out of the gate with a dollar value that’s typically unrealistic. If that’s your benchmark, it can feel like your claim has lost most of its value.”

Eric Hoaken, who acted for Medbuy, says his clients were confident the case law was on their side had the litigation gone any further.

“Having said that, they wanted to be responsible and to find a way to pay some compensation to the class. They could have taken a harder line, but expressly chose not to,” he says.

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